New York – Business has picked up at data-recovery services, insurance brokers and loss-prevention consultancies across the nation over the past few weeks, as images of flooded and destroyed Gulf Coast companies made many small-business owners uneasy about their own disaster preparedness.
At LiveVault, a data-backup and recovery company in Marlborough, Mass., orders doubled around the time in late August that Hurricane Katrina hit, said CEO Bob Cramer.
“A lot of people found us on the Web and called us frantically.
“They rapidly put orders through and begged us to get them up and running,” Cramer said.
Many small-business owners began thinking about contracting with a remote data-backup service to protect their computer data after the Sept. 11, 2001, terror attacks, Cramer said, but many never signed up with a provider until they were unnerved by Katrina’s devastation.
But Cramer also said business has leveled off somewhat since the early blip, a sign that many company owners, perhaps distracted by day-to-day demands, are again putting off disaster prep.
“They forget about disasters the week after they happen,” he said.
VeriCenter Inc., a Houston-based information technology firm with seven data-backup centers around the country, also saw an uptick in business, said co-founder Dave Colesante.
He’s found that many customers have been motivated to start tapping into money that was set aside for disaster preparation but that went unused until now.
“Toe-dippers” take leap
Colesante said many of those companies were what he called toe-dippers – “they were interested in looking but hadn’t actually purchased.”
“Katrina caused a lot of people to actually engage and force their IT staff to make the leap into the disaster-recovery world,” he said.
Insurance brokers have also been getting more phone calls and e-mails.
George Yates, president of Independent Insurance Agents and Brokers of New York, in East Hampton, said his firm has been getting calls from businesses wondering whether their insurance includes flood coverage. For many owners, the answer is no – flood insurance has to be purchased separately from a standard business policy – and so Yates’ company has been selling more flood coverage.
Yates said his company has been working on its own disaster planning. Located next to the Atlantic Ocean, East Hampton is vulnerable to hurricanes.
“We went through a fairly formal plan of what we would do if disaster struck,” he said.
The company has had its data backed up and arranged to have phone calls routed to remote locations if its office is unusable.
The video and photographs of stranded people in New Orleans also prompted small-business owners to think about some more mundane disaster preparation items. Be Ready Inc., an Oceanside, Calif., company, has seen increased demand for products such as its 72-hour kit, which has water, food bars, first aid kit, a solar radio, flashlight and other items, and for its water filtration products.
Jim Fry, a partner in Be Ready, said of business owners, “just in case people are at work, they want to be sure their employees are taken care of.”
Fry also has gotten more requests for disaster-preparation seminars that Be Ready holds.
Intellicomm Inc. CEO Harprit Singh said his Philadelphia-based company has gotten calls about its service, which allows businesses to set up a phone system remotely. He said Intellicomm tends to hear from companies when they’re in trouble, after a disaster, but he’s had calls from others who have started planning.
But people who provide disaster prep services still see many potential customers not taking steps to protect their businesses.
Cramer, the LiveVault CEO, has already seen some apathy setting in.
Plenty of excuses
Singh noted that many small businesses don’t prepare for disasters because they’re short of resources or because they don’t know what disaster preparation entails or what their options are. He noted that owners did get their companies ready for the Y2K bug in 1999, but there was so much media coverage that they couldn’t ignore the potential problem.
“There was so much noise, so everyone was prepared,” he said.
And Mike Lebovitz, vice president of Affiliated FM, a Johnston, R.I., property insurance firm, said many small businesses make the mistake of thinking that insurance, not disaster preparation, is what matters.
“Insurance should be the last part of that equation,” he said.
“Now is the time to think about planning.”
